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Argus Media: China lifts prices of Atlantic coking coal

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World Coal,

Argus Media has reported how US prices have risen further on the back of strong demand from Chinese mills as more February-loading cargoes are concluded ahead of the holidays.

The Argus fob Hampton Roads assessment for low-volatile coking coal moved up by US$1/t to US$139.50/t, pushed up by continued willingness from Chinese mills to pay a premium for US low-volatile coals amid tight supply. The high-volatile A assessment rose by US$4/t to US$132.50/t, buoyed by limited availability for the first quarter, while high-volatile B rose by US$2/t to US$118/t supported by overall strength in the market.

A cargo of Blue Creek #7 sold at US$197/t CFR China, US$7/t higher than a similar cargo traded week beginning 14 December 2020. A trader is offering a cargo of US low-volatile coking coal from a smaller producer for January loading and has received bids ranging from US$136 – 145/t fob Hampton Roads from Chinese buyers.

The US suppliers are beginning to find spot sales of high-volatile coking coal to China as mills continue to diversify their buying. A trader is offering a cargo of high-volatile, high-fluidity, high-sulphur coking coal to be loaded at the port of Mobile for around US$105 – 110/t fob Mobile and has received bids at US$116/t CFR China so far.

Availability in the high-volatile segment remains low and participants expect it to stay so well into 2Q20. A US producer sold a February-loading 35 000 t cargo of high-volatile A coal to a European mill at a fixed price of US$135/t fob Hampton Roads last week. Producers are taking a bullish outlook, with one expecting to offer at around US$150/t fob Hampton Roads in 2H21.

Mining company Coking Coal LLC has reopened the Pardee mine and preparation plant in Virginia, and the company is in discussions with several Chinese, South American and European mills for 2021 deliveries. "Our strategy is to invest in creating a blend for a specific mill and to guarantee that blend to them in the long term at a fixed price," said the company. The company blends its own coal and that of other producers into high-volatile and mid-volatile blends.

A panamax cargo of Colombian mid-volatile blended coking coal that was being negotiated at US$116/t fob Colombia last week is now close to being sold to a Chinese buyer for US$110/t fob Colombia. The Argus fob Colombia assessment for mid-volatile coking coal remained at US$110/t week beginning 21 December 2020.

A German steel mill that was seeking to fill a potential gap in its coke supply in 1Q20 bought a 20 000 t cargo of Colombian met coke with at least 65 CSR for US$400 - 405/t delivered on 18 December 2020, for January delivery. The same mill also bought a 50 000 – 55 000 t supramax cargo of 62 CSR met coke from a Chinese producer for US$400 – 405/t fob China. "Apart from that cargo I've seen no met coke selling from China to Europe," said a trader.

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